Does Cash Flow Increase as Rents Annually Increase?

[Gabriel Hernandez]

Hello, I’m a new poster and investor from Phoenix, AZ. It seems the general data shows that rents have gone up about 3% per year over the last 30 years. If I own a rental now that cash flows about $200 a month, will it’s cash flow increase each year as rents go up about 3% per year? Maybe there will be years ahead where the rent grows less than others but it seems that the 3% average growth accounts for this. I understand that inflation will also drive expenses up but it seems like that still wouldn’t be able to keep up with rent growth. I typed in my rental into the BP cash flow calculator and it supported this theory. It showed that cash flow goes up every year because of the rent growth. I would love to hear input on this.

[Bjorn Ahlblad]

@Gabriel Hernandez welcome to BP. To see an increase in rental income you need to be on your game. Yes rents increase but as was pointed out so do taxes and repairs. So raise rents every year and make sure new tenants are at market rent. Keep the property looking good inside and out to get the best tenants. Like any business you have to work at it.